Digital Angel reported today that it is eliminating its “corporate structure,” and the associated costs of a separate headquarters, and several management positions. The changes are expected to result in cost savings of about $2 million per year, according to the company.
Digital Angel said that the move is part of its turnaround plan. Over the past two years, Digital Angel has been divesting businesses deemed to be non-core in order to focus on the company’s animal identification business, Destron Fearing.
“Our focus on Destron Fearing eliminates the need for the corporate structure that was put in place by the previous management team,” said Joe Grillo, chief executive officer. “By integrating Destron Fearing’s operational management with Digital Angel’s management of public company functions and responsibilities, we are eliminating positions that can be more efficiently outsourced or performed at Destron Fearing’s headquarters in South Saint Paul, Minn.
“Under the new structure, we are more streamlined and have significantly lower overhead costs. These savings should allow us to further strengthen our balance sheet and redirect resources to the Destron Fearing Animal Identification business, where we see significant growth opportunities and a bright future.”
Jason Prescott, treasurer of Digital Angel and vice president of finance of Destron Fearing, has been named chief financial officer. Lorraine Breece has stepped down as CFO of Digital Angel, as this position has been integrated into the Destron Fearing finance department.
Effective Oct. 1, Jonathan McKeage, vice president of corporate development, and Ron Landers, vice president of internal audit, will step down and their positions will be eliminated. The positions of chief operating officer, held by Parke Hess, and general counsel, held by Patricia Petersen, will also be eliminated come Dec. 31.
“We would like to thank Lorraine, Parke, Pat, Jay and Ron for all that they have done for Digital Angel over the years and we wish them well in their future endeavors,” Grillo said. “These executives have worked hard to help restructure the business and establish a stronger financial foundation knowing full well that the result would most likely be the elimination of their positions.
“There is no longer a separate Digital Angel management team overseeing multiple business units. Instead, operational and corporate management are one in the same as we look toward the future focus on Destron Fearing and the growing animal identification market.”